The Sam Walsh iteration of Rio Tinto is making a happy habit of over-delivering on aggressive promise.

Rio’s underlying interim profit of $US5.11 billion has come in a country mile ahead of market consensus in a result that indicates management is right on track to deliver on the promise of capital management sooner rather than later.

The 2014 interim illuminates, among other things, the mitigating effect increased iron ore production can have on the otherwise depressing effect of the new pricing norm – which has been created by the recovery of more traditional balance in supply and demand.

It makes just as obvious the financial virtue of the effective implementation of the Heinz variety of cost and capital allocation disciplines that Walsh promised 18 months ago would be the mark of his unexpected era.

The market had banked on a gentle fall in Rio’s iron ore revenues and earnings. Instead revenues jumped 6 per cent to $8.09 billion while improved prudence and productivity drove profit up 10 per cent to $US4.68 billion.

The market was looking to these interim numbers for further evidence of game-changing momentum in Rio’s crisis-blighted and all-too-marginal aluminium arm. It got it.

On revenues that rose 26 per cent to just better than $US1 billion, the newly tight-fisted management extracted a 74 per cent increase in earnings before interest, taxes, depreciation, and amortisation, which came in at $US373 million.

Obviously, it is well appreciated that the light metal is what makes Rio different from its global peers. Rio infamously spent $US38 billion on Alcan to announce that point of difference. The subsequent $US30 billion writedown on Alcan says that difference came with a crippling cost.

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Self-evidently then, there is a long way to go, but at least this business is generating positive cash flows and some measure of earnings growth.

Across a swathe of other mission-critical markers, Rio outperformed market expectations through the first half.

Cash flows rose 8 per cent to $8.7 billion, reflecting positively on cost management and improved production and shipments.

Debt was further trimmed, as was Rio’s guidance on 2014 capital spending. The company said it would spend about $US9 billion this year rather than the $US11 billion previously foreshadowed and that it would achieve its long-term annual capital expenditure target of $US8 billion in 2015.

A question of leadership

Given few workers have harder earned or bigger thirsts than miners, the synergy here is obvious. Nonetheless, some have wondered that du Plessis feels he can find time to effectively chair two global businesses for all that they are both London-based

More interesting than that debate though is the speculation triggered within and without Rio by the dual-chairman’s assertion that he wants to oversee the miner for “several more years".

The readers of the runes reckon this says that du Plessis is committed to appointing the next chief executive and that he plans a transition pretty much in line with the three year time-frame he guaranteed incumbent Walsh when appointing him in such gloomy circumstances in early 2013.

Given that line holds true, then the 64-year-old Walsh has another 18 months before he leaves a job he never planned to get. That, of course, begs the obvious question of succession.

A wealthy pack of internal options is said to be led by Broken Hill’s own Chris Lynch.

Hand-picked by Walsh for the Rio chief financial officer role, the 60 year old is probably the only guy ever to have filled that role of esteem at both global miners fathered by his home town. And those who know Lynch will appreciate how much he would enjoy that idea.

The view that Lynch is now in the van for higher honours is informed by the theory that opportunity might have dawned just a bit early for the other leading internal candidates such as iron ore’s Andrew Harding and Rio copper’s Jean-Sébastien Jacques.

One view is that, at 47 and 42 respectively, both have time as their friend and a weight of existing responsibilities that require successful management as final proof of their executive pudding.

Having redesigned the iron ore division’s drive to 350 million tonnes a year, Harding is running an implementation destined to finish in 2016 or so. And, for his sins, Jacques is working with urgent patience through the diplomatic challenges that have stalled progress on phase two of the Oyu Tolgoi copper project in Mongolia.

There is more confidence, on the other hand, that whatever happens, Rio’s most likely next CFO is the current global head of strategy, Peter Toth. Apparently Lynch is a huge fan.